[env-trinity] FARM BILL DEAL?

[Patrick Truman]

      California could reap windfall
      from farm bill deal
      Carolyn Lochhead, Chronicle Washington Bureau

      Thursday, October 18, 2007

        
      (10-18) 04:00 PDT Washington - -- Senate Democrats announced a breakthrough in a long-stalled farm bill Wednesday that would provide billions of dollars for California fruit and vegetable marketing, farm conservation and food stamps - but would maintain costly, traditional crop subsidies for corn, wheat, cotton, rice and soybeans.

      The linchpin of the deal was $3 billion in new money that suddenly appeared when the Congressional Budget Office determined that a new option for subsidized farmers to choose an alternative insurance-style program would save money. That money could pay for environmental and nutrition programs while shielding subsidies from cuts.

      But it was unclear whether the deal would appease the unusual left-right alliance of reformers hoping to change the 70-year-old system of crop subsidies that they contend has speeded farm industrialization, harmed the environment and contributed to the nation's obesity epidemic. Fruit and vegetable growers said they might not be happy, either.

      All this poses a quandary for California's Democratic Sens. Barbara Boxer and Dianne Feinstein, who are being lobbied vigorously by the state's cotton and rice farmers and fruit and vegetable growers who want more money for research and marketing, and Bay Area environmental and food activists seeking to change the government's role in agriculture. Neither senator has yet taken a position. 

      Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, said he has broad support on his committee, a bastion of traditional farm interests, and plans a vote as early as next Wednesday. The deal fended off powerful opposition from subsidy supporters in both parties from the South and Midwest who threatened to thwart any compromise that reduced their subsidies.

      Harkin conceded that the agreement was not a big break with the past.

      "Farm programs don't take sharp turns, but we do try to bend the rails a little bit," Harkin said.

      Whether the deal forestalls fights in the overall Senate remains to be seen.

      Andy Fisher, a spokesman for Sen. Richard Lugar, an Indiana Republican who is teaming with New Jersey Democrat Frank Lautenberg on an alternative that would eliminate traditional subsidies and divert the savings to the wish list of reformers, said the deal was "a bad bill. It's bad for taxpayers, farmers and the American economy."

      Environmental groups were cautious, waiting for more information. "It's a step in the right direction, but it's still insufficient to meet demand" from the two out of three farmers who are turned away from conservation programs, said Sara Hopper, an attorney with Environmental Defense.

      All sides have a lot at stake in the $286 billion farm bill; farm laws are renewed just once every five years. Decisions made now will lock in policies until 2013 that will have an enormous impact on the American food system.

      Advocates for changing the system are spread across the political spectrum.

      Food activists contend that farm subsidies encourage production of the starches, sugars and oils that now permeate processed foods and meats. They want to end that system and encourage the farm-to-fork movement of healthier and more local foods.

      Environmental advocates contend that the subsidies encourage pesticide and fertilizer use that has created a "dead zone" in the Gulf of Mexico the size of New Jersey from farm runoff in the Mississippi River. Rural development activists say the subsidies have speeded farm consolidation and emptied small towns.

      Overseas development lobbyists say the payments hurt poor farmers in Africa and elsewhere who have to compete on depressed world markets. Trade specialists say the subsidies violate U.S. trade treaties and invite retaliation on other industries. Economists say the subsidies discourage innovation and serve no public purpose. Budget hawks say most of the payments go to a small number of the most prosperous farmers who earn far more than the average taxpayer - at a time when farm income is breaking records.

      Even some subsidized farmers object. "It seems to me it's poor government when in a time of tight budgets and good economic conditions, we have the same old programs, rather than taking the opportunity to reform when economic conditions are good," said Ed Carter, a Minnesota corn and soybean farmer who has joined the reform alliance. 

      Harkin, a liberal populist and no fan of traditional subsidies, has been battling fellow Democrats on his own committee to divert money to conservation and nutrition programs. The standoff has deadlocked Senate action since the House passed its farm bill in July that increases subsidies. 

      Harkin said the newfound money took him by surprise and "really helped us out a great deal" to pay for what everyone wanted.

      Harkin said he was especially proud of getting $1 billion to increase fruit and vegetable consumption by poor children, money to help farmers through the expensive transition to organic farming, and new funds to promote biomass fuels.

      "This is a forward-looking bill with critical investments for the future in energy conservation, nutrition, rural development, and promoting better diets and health for all Americans," Harkin said.

      Harkin said there also will be no cut in the $5 billion spent each year in automatic direct payments to people who own land that has grown subsidized crops, regardless of market conditions or even if they produce anything now. 

      Sens. Kent Conrad, D-N.D., and Saxby Chambliss, R-Ga., have insisted on preserving those payments as a safety net for farmers. 

      Farmers could, however, opt instead for a "revenue assurance" plan devised by the corn growers' lobby that would guarantee farmers a base level of revenue regardless of prices or yields. Unlike price supports that give aid only when prices drop, this program would also make payments in case of drought or other events that destroy crops, even if prices are high.

      But there may be a big sticking point with California produce growers: Grain and cotton farmers who opt for the new program would be allowed to plant fruits and vegetables on their land. 

      Currently, farmers in the Midwest or South who get federal money are not allowed to switch to specialty crops because California farmers contend that would give those farmers an unfair advantage.

      Fruits, nuts and vegetables are not eligible for federal subsidies.

      Tom Nassif, head of the Western Growers Association, said the $3 billion that budget estimators think the new program would save the government on crop subsidies is about what California produce growers would suffer in losses if subsidized farmers start competing with them by growing fruits and vegetables.

      The federal aid those farmers receive "makes it much easier for them to grow more crops and have more production without increasing demand, and that lowers market prices," Nassif said. "A subsidy is a subsidy. We are very much opposed to it and have been from the beginning."

      California's produce industry has had an on-off alliance with environmental, religious and other groups opposing the farm bill. They broke off to support the House measure after they secured $1.6 billion for research and marketing, angering reform groups who continued to oppose the subsidies for commodity crops.

      California also grows heavily subsidized cotton and rice. Most of these growers want to continue those programs.

      E-mail Carolyn Lochhead at clochhead at sfchronicle.com. 
     
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